Timbs v. Indiana: SCOTUS Hits the Brakes on Major Source of Revenue for States & Municipalities

States and municipalities have increasingly relied on fines and forfeitures as a means to raise revenue, and the ability of law enforcement to impose fines and forfeitures for various criminal and civil offenses has largely gone unchecked by the federal government until recently. The United States Supreme Court’s February 20, 2019 decision in Timbs v. Indianasignificantly limits the once broad leeway states and municipalities have enjoyed in imposing fines and forfeitures. Under Timbs, law enforcement must now be additionally cautious not to impose fines and forfeitures that are far out of proportion to the gravity of the offense committed.

The facts in Timbs relate to a criminal defendant (Tyson Timbs) who pleaded guilty to dealing heroin in the state of Indiana. The maximum fine for the offense was $10,000, though Mr. Timbs ended up paying fines and costs amounting to $1203. In addition to paying fines, after Mr. Timbs was arrested law enforcement seized his $42,000 Land Rover SUV that he had bought with a life insurance payout following the death of his father. Law enforcement justified the forfeiture of Mr. Timbs’ Land Rover on the grounds that it had been used to transport heroin.

Mr. Timbs challenged the forfeiture of his Land Rover in Indiana state court, arguing that it resulted in a violation of the Excessive Fines Clause of the 8th Amendment to the United States Constitution as incorporated to the states via the 14th Amendment’s Due Process Clause. Both the trial and appeals courts found that the forfeiture of the $42,000 vehicle, which amounted to more than four times the $10,000 maximum fine for dealing heroin in Indiana, was grossly disproportionate to the gravity of Mr. Timbs’ offense. Because of great value disparity between the actual fines for Mr. Timbs’ crime and the property that law enforcement seized, the Indiana trial and appeals courts found that the 8th Amendment’s Excessive Fines Clause had been violated by the state. The Indiana Supreme Court reversed after finding that the Excessive Fines Clause related only to federal action.

On appeal to the Supreme Court, it was unanimously held that the Excessive Fines Clause was incorporated to the states through the 14th Amendment. In delivering the opinion of the Court, Justice Ginsburg provided an overview of Anglo-American legal history on excessive fines, as well as relied on the decision in McDonald v. Chicago to test whether the freedom from excessive fines and forfeitures was both “fundamental to our scheme of ordered liberty” and “deeply rooted in this Nation’s history and tradition.” In noting that the codification of the principles behind the Excessive Fines Clause date back to the Magna Carta and colonial Virginia, the Court unanimously agreed that the freedom from excessive fines and forfeitures was indeed “fundamental” and “deeply rooted” in American legal tradition.

In contrast to how easily the Court seemed to reach its unanimous decision, the real-world effects of Timbs on state and local law enforcement’s ability to raise revenue are more complex. A major practical takeaway from Timbs is that going forward, state and local law enforcement are going to have to keep in mind that each and every fine and forfeiture imposed will have to be in proportion to the gravity of the offense charged, or else face potential federal constitutional challenges grounded in the 8th Amendment’s Excessive Fines Clause. Said differently, the difference after Timbs is that law enforcement may have additional constitutional litigation on their hands for both large and small fines and forfeitures.

The Texas Public Policy Foundation, in connection with Forbes Magazine, published an article in 2016 ranking cities across the United States for per capita fines, fees, and forfeitures. Among the top three cities for per capita fines were Washington D.C ($226.78), Chicago ($97.07), and Boston ($82.04). Milwaukee ranked much lower at $8.77 in fines per capita. Whether the Timbs decision will affect these numbers is yet to be known, but it is more likely than not that law enforcement can expect to be seeing additional challenges to the various fines and forfeitures they levy in the coming years.

In Wisconsin, municipalities have finite means to collect revenue and primarily rely on property taxes. Fines and forfeitures have been used as a secondary means to provide governmental funding. A recent study by the Wisconsin Public Policy Forum has found that Wisconsin municipalities depend on property taxes more than their midwestern neighbors and that property taxes have increased over the last generation while state shared revenue has remained stagnant. As a result, Wisconsin cities may be in an especially tenuous position after Timbs, requiring further increases to property taxes, working with the state to increase sales taxes within their boundaries, or finding other creative ways to generate revenue.

The city of Milwaukee recently increased its fine for littering from $50 to $500. While the policy of deterrence behind this ordinance is sound, whether the tenfold increase in the fine is in proportion to the gravity of the offense of littering can arguably be seen as open question under the rationale laid out in Timbs. While changes to law enforcement revenue collecting tactics in light of Timbs have yet to fully actualize, the decision will surely be something that both legal scholars and law enforcement will have to consider for years to come.

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